Restructuring

For creditors, the restructuring of a distressed company is much more preferable than allowing it to fail. The liquidation value of an enterprise is invariable much less that the sum of is parts as a going concern. However, for the restructuring process to succeed it is important that there is an early recognition of the difficulties faced by the enterprise and a willingness among the stakeholders to make sacrifices to save the enterprise.

It is also crucial to ensure that any financial restructuring is accompanied by a thorough and detailed review of the operational aspects of the enterprise. A financial restructuring goes hand in hand with an operational restructuring. Only by knowing what profits a restructured business can generate, is it possible to build a revised financial structure which will support the new operational levels.